The Bangladesh Financial Intelligence Unit (BFIU) has issued comprehensive compliance directives targeting capital market intermediaries to prevent illegal funds, money laundering, and suspicious financial activities within the country's stock exchanges.

Under Circular No. 31, issued on Tuesday (September 15), BFIU instructed chief executives of all capital market entities—including brokerage houses, merchant banks, asset management firms, securities custodians, and portfolio managers—to enforce rigorous anti-money laundering (AML) and counter-terrorist financing (CTF) frameworks. The circular mandates that all market entities establish an internal AML/CTF policy approved by their respective boards or senior management.

Key Compliance Directives Mandated by BFIU

• Central and Branch Compliance Structures: Intermediaries must establish a Central Compliance Unit (CCU) led by a Chief Anti-Money Laundering Compliance Officer (CAMLCO) at their head offices and designate Branch Anti-Money Laundering Compliance Officers (BAMLCO) across all operating branches.

• Customer Due Diligence & e-KYC: Market entities are required to verify customer credentials using reliable national databases (NID, passport, or birth registration certificates) during account opening, with optional integration of Electronic Know-Your-Customer (e-KYC) processes.

• Beneficial Ownership Verification: Entities must identify and record ultimate beneficial owners (BOs) who hold at least 20 percent of shares or maintain controlling authority over corporate accounts.

• Enhanced Due Diligence (EDD): Strict scrutiny must be applied to Politically Exposed Persons (PEPs), domestic influential figures, high-ranking officials of international organizations, their close family members, and accounts involving offshore corporate structures. Intermediaries are also required to cross-reference client databases against UN Security Council and Bangladesh government sanction lists.

• Suspicious Transaction Reporting (STR): Branch officers must report unusual, complex, or inconsistent transactions to the CCU. Following internal verification, verified suspicious transactions must be reported confidentially to BFIU via the web-based goAML portal.

• Self-Assessment and Independent Audits: Intermediaries must conduct biannual self-assessments (covering January–June and July–December periods) using BFIU-prescribed checklists and submit reports by the 15th of the following month. Reports must also undergo independent evaluation by internal audit departments.

• Record Preservation and Staff Vetting: Market institutions must conduct background checks during employee recruitment, ensure regular AML training for personnel, and maintain complete customer identification and transaction records for a minimum of five years post-account closure.

Financial analysts and market regulators expect these measures to curb illicit capital infiltration, eliminate anonymous trading accounts, and bolster transparency and market integrity across Bangladesh's financial sector.